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Trump’s Tax Plan Won’t Help Keep Us Out Of A Recession, Says Nobel Laureate

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Cycles are found all across planet Earth, outer space, inside our bodies on a microscopic level, and everywhere else in between. Eventually, these cycles experience upturns or downturns. Such changes are natural – without such fluctuations, life wouldn’t be what we know it to be.

Financial markets are also subject to cycles. Over the past decade, the general performance of the Dow Jones Industrial Average, the Standard & Poor’s 500 Index, the Nasdaq, and trading markets in general in the United States has largely been positive.

The same can be said for the United States’ housing market over the past decade. It couldn’t perform any worse after the Great Recession, which was caused by the subprime mortgage lending crisis, in which financial institutions across the United States granted mortgages to individuals and couples who simply couldn’t afford them. Since nobody could pay their mortgages, the price of homes dropped to the lowest point they’d been at in many years.

The housing market, financial exchanges, and stock indexes have all been doing well for themselves since the close of the Great Recession in 2009. However, experts believe that the United States’ financial markets will soon face an economic recession.

According to Edmund Phelps, the winner of the Nobel Memorial Prize in Economic Sciences in 2006 and current professor of economics at the Ivy League’s very own Columbia University, the economy is slated to enter a recession within the next two years.

In 2017, United States President Donald Trump had enacted a tax plan called the Tax Cuts and Jobs Act. Although it has had a positive impact on the economy and is slated to continue having a beneficial effect on the economic health of the wealth of business transactions across the United States, Mr. Phelps believes that these positive effects won’t last any longer than two years at the longest.

The Tax Cuts and Jobs Act effectively lowered taxes for many Americans, which has meant that Americans have had more money to spend on goods and services. This has been good for the economy. Further, Trump cut tax rates for corporations in the United States. A vast number of these corporations have bought back their own stock over the past two years, something that has also had a positive effect on the economy.

The United States Federal Reserve has also shared that the United States’ economy has been growing at increasingly slower rates, a bad sign for the nation.

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